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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) CUID No. SC0008 (City of Union)
)
Charter Communications II, L.P. )
)
Small System Filing to Support )
Cable Programming Services Tier Rates)
ORDER
Adopted: September 16, 1997 Released: September 19, 1997
By the Acting Chief, Financial Analysis and Compliance Division, Cable Services Bureau:
1. In this Order we consider a complaint concerning the rate of the above-captioned operator
("Operator") for its cable programming services tier ("CPST") in the community referenced above. On
April 5, 1996 Operator filed FCC Form 1230, seeking to justify its CPST rate through the simplified small
system cost of service procedures pursuant to the Federal Communications Commission's ("Commission")
Sixth Report and Order and Eleventh Order on Reconsideration ("Small Systems Order"). In this Order,
we grant Operator's request for small system relief under the Small Systems Order and, based on our review
of Operator's FCC Form 1230 filing, deny the pending CPST complaint and find the CPST rate to be not
unreasonable.
2. Under the Communications Act, the Commission is authorized to review the CPST rates
of cable systems not subject to effective competition to ensure that rates charged are not unreasonable. The
Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), and our rules in
effect at the time the complaints were filed, required the Commission to review CPST rates upon the filing
of a valid complaint by a subscriber. The filing of a valid complaint triggers an obligation on behalf of the
cable operator to file a justification of its CPST rates. Under the Commission's rules, an operator may
attempt to justify its CPST rate through a benchmark showing, a cost of service showing, or a small system
cost of service showing. In any case, the operator has the burden of demonstrating that its rate is not
unreasonable. If the Commission finds a rate to be unreasonable, it shall determine the correct rate and any
refund liability.
3. The Commission's original rate regulations took effect on September 1, 1993. The
Commission subsequently revised its rate regulations effective May 15, 1994. In a further effort to offer
small cable companies administrative relief from rate regulation, the Commission amended the definition
of small cable companies and small systems and introduced a simplified form of small system rate relief in
the Small Systems Order. Operators attempting to justify their rates through small system relief must file
FCC Form 1230. FCC Form 1230 requires that the Operator Selected Per Subscriber Monthly
Programming Rate Per Channel (FCC Form 1230, Line A11) not exceed the Per Subscriber, Per Channel
Monthly Programming Costs (FCC Form 1230, Line A6). Cable systems serving 15,000 or fewer
subscribers, and owned by a company having 400,000 or fewer subscribers, may elect to use the small
system rate mechanism found in FCC Form 1230 in lieu of other Commission rate processes, provided the
Commission has not reached a final resolution on the rate complaints filed against the system. In the
present case, although Operator had filed FCC Form 393 with the Commission, prior to filing FCC Form
1230, no final resolution of the FCC Form 393 had been reached. Consequently, we will consider only
Operator's FCC Form 1230.
4. On April 5, 1996 Operator filed FCC Form 1230 for the community referenced above
seeking to justify its CPST rate through the simplified small system cost of service procedures under the
Commission's Small Systems Order. On September 5, 1997, Operator filed a letter with the Commission
certifying that the system for the community referenced above is eligible for the rate treatment reserved for
small systems. Operator's letter states that on the effective date of the Small Systems Order, Operator's
system serving the community referenced above had approximately 4,149 subscribers and that the entities
legally affiliated with Operator, for purposes of small system rate relief, served approximately 208,700
subscribers. Operator's certification letter also states that, as of September 5, 1997, Operator's system
serving the community referenced above has approximately 4,253 subscribers. Pursuant to Section 76.934
of the Commission's rules, "the size of a system or company shall be determined by reference to its size as
of the date the system files with its franchising authority or the Commission the documentation necessary
to qualify for the relief sought or, at the option of the company, by reference to system or company size as
of the effective date [of these rules]." The Small Systems Order provides that:
A system's initial and continued eligibility for this new form of relief shall be
determined in the same manner as any other relief now available to them. Thus, if a
system qualifies for relief under this approach as of the effective date of this order or as
of the date it files Form 1230, it shall remain eligible for so long as it serves 15,000 or fewer
subscribers, regardless of whether it, or the cable operator that owns the system, is
subsequently acquired by a company that exceeds the 400,000 subscriber limit, or if its
current operator subsequently exceeds 400,000 subscribers due to the normal growth of its
systems. When a system that has established rates in accordance with Form 1230 exceeds
15,000 subscribers, the system may maintain its then existing rates. However, any further
adjustments shall not reflect increases in external costs, inflation or channel additions until
the system has re-established initial permitted rates in accordance with our benchmark or
cost-of-service rules.
Small Systems Order at 73.
5. We find that as of the effective date of the Small Systems Order, August 21, 1995, Operator
was a company with fewer than 400,000 total subscribers and that the system in question currently serves
fewer than 15,000 subscribers, thereby making it eligible for small system relief. Upon review of Operator's
FCC Form 1230, we find that Operator's actual CPST rate of $12.95, as reported on Line A11, is not
unreasonable.
6. Accordingly, IT IS ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R. Section 0.321, that Operator's request for small system relief IS GRANTED.
7. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R. Section 0.321, that the actual CPST rate of $12.95 charged by Operator in the community referenced
above IS JUSTIFIED.
8. IT IS FURTHER ORDERED, pursuant to Section 0.321 of the Commission's rules, 47
C.F.R. Section 0.321, that the complaint against the monthly CPST rate charged by Operator during the
period under review in the community referenced above IS DENIED.
9. This action is taken pursuant to delegated authority under Section 0.321 of the Commission's
rules, 47 C.F.R. Section 0.321.
FEDERAL COMMUNICATIONS COMMISSION
Margaret M. Egler
Acting Chief, Financial Analysis and Compliance Division
Cable Services Bureau